Accepting a bad tenant will inevitably lead to problems. While there’s no foolproof way to avoid every potentially bad egg, most can be identified with the appropriate due diligence; this means conducting a comprehensive tenant screening to evaluate each applicant.
Without thorough tenant assessment and steadfast administration of strict standards, commercial property owners could be risking costly consequences.
- Lost rental income
There are three ways a substandard tenant can cause an owner to lose rental income:
- Failure to pay rent
- Payment of only partial rent
- Causing significant damage to the property
Every month rent isn’t collected in full represents lost income and additional running costs, and damage beyond normal wear-and-tear will require unnecessary time and resources to be spent on repairs.
- Lost time
The amount of time required to chase bad tenants can be astronomical. The need for endless phone calls, emails, text messages, notices, and in-person confrontations will consume valuable time and energy.
Managing a bad tenant can be exhausting and an unnecessary waste of owners’ time. Active investors will have less time to pursue additional investments, and less time to spend with family and friends.
Here’s how you can avoid getting caught with problem-tenants from the outset:
- Ask prospective tenants pertinent questions. Screening requires asking the right questions so you can adequately assess the answers.
- Check references to avoid getting conned. Not all referees will give glowing reports. Always verify the references provided.
- Run credit checks. There’s no other way to substantiate whether an applicant is financially responsible.
- Cross-check phone numbers provided with official business listings during the verification process.
- Don’t let missed rent payments go unaddressed. If you let one missed payment slide, it can quickly turn into multiple missed payments, and the expectation that you’ll waive late fees.
- Evict when necessary. Don’t hesitate to serve formal paperwork when you see red flags that are grounds for eviction.
Engaging a quality Property Manager can reduce hassles and increase returns.
Have you ever wondered how much time and energy you can save by engaging a quality Property Manager? When you don’t have the time, energy, or patience to be a full-time landlord, a Property Manager can remove the headaches of self-management.
The award-winning Property Management team at Ray White Commercial Bayside delivers personalised property management solutions for all categories of commercial property. Call us today to find out how we can maximise the value of your commercial asset and provide peace-of-mind that your commercial investment is in good hands.